IRR Annuity Problems

For each problem, determine the internal rate of return from the clues. You should have your PV table and a calculator handy for these! Note: the IRR is the rate that makes the PV of the cash flows EQUAL to the investment.

1. Harris Company pays $5,446.4 for a three year annuity of $2,000 each year for 3 years.

What is the Internal Rate of Return? % 2. Clise Company pays $14,410.8 for a three year annuity of $6,000 each year for 3 years.

What is the Internal Rate of Return? % 3. Lorne Company pays $23,193.9 for a three year annuity of $9,000 each year for 3 years.

What is the Internal Rate of Return? %